CORNISH v. USA

Filing 59

REPORTED ORDER denying 50 Motion for Attorney Fees. Signed by Senior Judge Eric G. Bruggink. (jpk1) Copy to parties.

In the United States Court of Federal Claims
No. 12-861C
(Filed: July 30, 2014)
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THOMAS R. CORNISH,
Plaintiff,
v.
THE UNITED STATES,
Defendant.
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ORDER
We entered judgment for plaintiff on September 30, 2013. Cornish v.
United States, 112 Fed. Cl. 801 (2013). Pending is plaintiff’s post-judgment
motion under 28 U.S.C. § 2412(b) (2012) for attorney fees in the amount of
$189,108 and litigation expenses totaling $5,387.64. The matter is fully
briefed. Oral argument was held on July 18, 2014. Because plaintiff has not
identified a basis on which fees can be awarded, the motion is denied.
The facts surrounding this case are set out in this court’s September 30,
2013 opinion, 112 Fed. Cl. 801. Plaintiff was successful on the merits and
now claims he is entitled to fees and expenses pursuant to 28 U.S.C. § 2412(b),
which states, “[T]he United States shall be liable for fees and expenses to the
same extent that any other party would be liable under the common law or
under the terms of any statute which specifically provides for such an award.”
Plaintiff relies on the “common benefit” and “bad faith” exceptions to the
traditional American rule that each party bears its own litigation expense.
Plaintiff also cites the Back Pay Act, 5 U.S.C. § 5596, as an example of a
statute that could provide him with a fee award.
A. Common Benefit
The “common benefit” exception allows attorney fees to be awarded
when: “(1) the plaintiff shows that it has conferred a substantial benefit on

members of an ascertainable class, and (2) the jurisdiction of the court permits
an award that will operate to spread the costs proportionately among them.”
MVM, Inc. v. United States, 47 Fed. Cl. 361, 364 (2000) (citing Mills v. Elec.
Auto-Line Co., 396 U.S. 375, 393 (1970)). The cost of litigation may be
spread to all of the benefitted parties by assessing a charge for attorney fees
directly against the recovered assets. Knight v. United States, 982 F.3d 1573,
1583 (Fed. Cir. 1993). The common benefit exception evolved from the
“common fund” exception to the American rule that each party bears its own
litigation expense. See Aquinoga v. United Food & Workers Int’l Union, 993
F.2d 1480, 1482 (1993). Under the common fund exception, a successful
plaintiff is awarded attorney fees because his suit “creates a common fund, the
economic benefit of which is shared by all members of the class.” Id. Plaintiff
did not cite nor were we able to find any case applying the common benefit
exception without the existence of a fund created by the litigation and
common to all of the other benefitted litigants.
Plaintiff argues that he benefitted and advanced the interests of all nonArticle III judges by establishing liability and allowing expedited treatment to
be given to all of the bankruptcy judges in Houser v. United States. See Houser
v. United States, No. 13-706C, 2013 U.S. Claims LEXIS 2112, at *2-3 (Fed.
Cl. Sept. 30, 2013) (citing opinion in Cornish to establish liability). Plaintiff
suggested at oral argument that his fees and expenses case can be charged
against the United States and paid from the United States’ Judgment Fund as
a way of reflecting that other Article I judges in different proceedings have
benefitted from the work done by Judge Cornish in this case.
Defendant disputes the factual assertion underlying the request, namely
that there was a direct connection between recoveries by judges in other
lawsuits because of the result of this suit. It is unnecessary to consider that
question, however, because we are persuaded that, even if others benefitted by
being able to rely on the result here, the common fund rationale for shifting
fees does not apply. The Judgment Fund is a general fund set up to pay the
United States’ litigation liabilities. It is not a common fund created by
plaintiff’s successful suit, and it certainly is not available to the court in this
suit, other than to order payment with respect to Judge Cornish. Congress adds
to the judgment fund when necessary, but that need is triggered by judgments
in other, separate proceedings. We agree, in addition, with the decision in
Grace v. Burger, 763 F.2d 457, 459-60 (D.C. Cir. 1985), cert. denied, 474
U.S. 1026 (1985), that assessing taxpayers generally is not a legitimate
extension of the common fund doctrine. The common fund doctrine assumes
a particularized pot of money available to the court against which to spread the
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cost of generating that fund. Amortizing the cost over millions of taxpayers
breaks the connection between benefit and cost sharing. Nor would we be
authorized in this suit to reach into other litigation and siphon from awards in
favor of other judges for the purpose of extracting a payment for the perceived
proportionate share of benefit derived from this action. Even if those suits are
in this court, they are insulated from this action. Plaintiff cannot recover under
the common benefit exception.
B. Bad Faith
Plaintiff also claims he is entitled to fees because of defendant’s bad
faith conduct in this litigation. The bad faith exception is narrow and invoked
in cases of “vexatious, wanton, or oppressive conduct.” N. Star Alaska Hous.
Corp. v. United States, 85 Fed. Cl. 241, 244 (2009) (quoting F.D. Rich Co. v.
United States ex rel. Indus. Lumber Co., 417 U.S. 116, 129 (1974)). “Such an
award is punitive in nature and should be imposed only in exceptional cases
and for dominating reasons of justice.” Id. at 244 (citing Hall v. Cole, 412 U.S.
1, 5 (1973)).
Plaintiff argues that, after the Article III judges in Beer v. United States
were awarded back pay and correction of their pay records to reflect
previously denied cost of living adjustments (“COLAs”), defendant should
have known that all judges whose pay was statutorily linked to the pay of
Article III judges would also be entitled to an increase in salary and back pay.
According to plaintiff, defendant should have taken corrective action
immediately, and because it did not, plaintiff was forced to file suit. Plaintiff
quotes our ruling in the September 30, 2012 opinion that plaintiff had a
“perfectly straightforward statutory claim,” offered a “more apt line of
statutory construction principles,” and that “it would approach absurdity to
unscramble that superstructure [of judicial pay statutes] in pursuit of a
chimerical congressional intent with respect to a piece of unconstitutional
legislation.” Cornish, 112 Fed. Cl. at 805. Defendant’s interpretation would
have resulted in administrative confusion and inconsistency with the linkage
between Article I and Article III salaries. Plaintiff concludes that defendant’s
position was therefore unworkable and arbitrary and could justify an award of
attorney fees.
Defendant answers that its litigation position was justified because the
issues presented were of first impression. Accordingly, it could not have been
proceeding in bad faith.

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Plaintiff responded at oral argument that this case did not present an
issue of first impression because Congress has already spoken on the issue.
Plaintiff’s point was that 28 U.S.C. § 153(a) was enacted to ensure that
bankruptcy judges were treated equally with respect to COLAs. Plaintiff
pointed to the amicus brief of the National Conference of Bankruptcy Judges
(“NCBJ”), filed during the liability phase of this case, wherein the NCBJ
explained that 28 U.S.C. § 153(a), which guarantees each bankruptcy judge a
salary equal to 92 percent of that of a district judge, was enacted after United
States v. Will held that a different set of COLA denials for Article III judges
were unconstitutional, 449 U.S. 200, 226-30 (1980). The brief explained that
there was a general understanding in the judiciary that the Will holding did not
apply to Article I judges, and thus 28 U.S.C. § 153(a) was enacted after Will
to correct this general imbalance and insure the same salary protection for
bankruptcy judges. Therefore, plaintiff argues, Congress’ intent with the pay
parity statute was already known, and this case was not one of first impression.
Thus, in plaintiff’s view, defendant unnecessarily opposed applying the
COLAs to bankruptcy judges.
Although we agreed with plaintiff and the NCBJ that 28 U.S.C. §
153(a) was intended to create permanent parity in pay for bankruptcy judges,
that does not resolve the question of whether the application of that statute to
the facts of this case presented a novel question. Congress was not deciding
the issue litigated in this case, nor could it. The courts are entrusted with
resolving cases and controversies. There existed no prior judicial precedent
that addressed the issue precisely litigated in this case. That is what is meant
by a case of first impression. Although that may not ipso facto preclude a
finding of bad faith, it makes proving bad faith more difficult. Indeed, it is not
surprising that the Department of Justice would prefer to have a judicial ruling
before taking it upon itself to accede to extending the Beer decision to Article
I judges. The fact that we thought the statutory implications of Beer were plain
does not mean that it was unreasonable to suggest that the constitutional
protections for Article III salaries create principled differences. Except for
arguing that defendant should not have opposed liability, plaintiff has not
alleged any vexatious or oppressive conduct or shown that “dominating
reasons of justice” dictate an award of fees in this case. Therefore, we find no
bad faith on the part of defendant to warrant fee shifting.
C. Back Pay Act
Plaintiff also cited the Back Pay Act as illustrative of a statute that
could provide him with fees under section 2412(b), in its reference to “any
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statute which specifically provides for such an award.” The Back Pay Act
provides that:
An employee of an agency . . . who is found by appropriate
authority under applicable law, rule, regulation, or collective
bargaining agreement, to have been affected by an unjustified or
unwarranted personnel action which has resulted in the
withdrawal or reduction of all or part of the pay, allowances, or
differentials of the employee-(A) is entitled, on correction of the personnel action, to
receive for the period for which the personnel action was
in effect-....
(ii) reasonable attorney fees related to the
personnel action which, with respect to any
decision relating to an unfair labor practice or a
grievance processed under a procedure negotiated
in accordance with Chapter 71 of this title, or
under Chapter 11 of Title I of the Foreign Service
Act of 1980, shall be awarded in accordance with
standards established under section 7701(g) of
this title . . . .
5 U.S.C. § 5596(b)(1) (2012).
The Back Pay Act, however, cannot be what section 2412(b) was
referencing as a statute that provides for an award of fees. Section 2412(b)
intended to place the Government in the same shoes as “any other party,” as
in, “any party other than the United States.” Gavette v. Office of Pers. Mgmt.,
808 F.3d 1456, 1466 (Fed. Cir. 1986). The Back Pay Act itself directly makes
the United States liable to possible fee shifting. Section 2412(b) thus can refer
only to statutes that make parties other than the United States liable for fees.
Id.
We agree with defendant, moreover, that it is too late, after entry of
final judgment, to invoke the Back Pay Act. The act is a source of potential
liability against the United States for payment of back wages when wages have
been determined to have been improperly withheld. Only as an incident to that
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return of wages are fees allowed as an additional remedy. Plaintiff did not
invoke the Back Pay Act in its complaint. It did not need to. The court has
authority under the Tucker Act, 28 U.S.C.§ 1491 (2012), both to adjudicate
liability pursuant to the pay statutes and to order the return of improperly
withheld wages. Plaintiff has not asked to amend its complaint to include the
Back Pay Act, and we agree with defendant that it is too late, after judgment
has been entered, to amend the complaint to add it now. See generally Stueve
Bros. Farms, LLC v. United States, 107 Fed. Cl. 469, 476 (2012) (discussing
amendment after judgment). Finally, we also agree with defendant that the
circumstances permitting an award of fees and expenses under the Back Pay
Act (bad faith, egregious behavior, gross procedural error, etc.) are not present
here.
In sum, the court does not have authority to shift fees to the United
States. Accordingly, plaintiff’s motion for attorney fees and litigation expenses
is denied.

s/ Eric G. Bruggink
ERIC G. BRUGGINK
Judge

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